McGraw's money spreads to panhandles

John O'Brien Jun. 5, 2007, 3:00pm


CHARLESTON, W. Va. - Proving that his controversial efforts to disperse money from a settlement gained on behalf of the West Virginia's Department of Health and Human Resources are indeed statewide, Attorney General Darrell McGraw last week spread $95,000 between the state's two panhandles.

Thursday, McGraw was in the Eastern Panhandle to give $50,000 to the Jefferson County FOCUS Coalition, a substance abuse-prevention group that targets youths by offering events like teen dances, youth music venues and prevent drunk driving courses. The money McGraw handed out was earned in 2004, when McGraw settled allegations against Purdue Pharma that its prescription painkiller OxyContin put a strain on the state's Medicaid budget by creating addicts.

On Friday, McGraw gave out even more of the settlement, $45,000 to the Juvenile Mediation and Victim Assistance programs in the Northern Panhandle. The Juvenile Mediation Program received $25,000, and the Victim Assistance Program got $20,000.

"Public outreach organizations like FOCUS provide our communities with preventative programming which helps to make our communities safer places to live," McGraw said. "The opportunity to reach our youth and help them make better decisions is a positive factor in the success of our communities. The long term savings in their personal lives, as well as law enforcement, incarceration, and rehabilitation costs is substantial."

Also substantial has been the buzz created by McGraw's handling of the settlement funds. The four-term Democrat never handed the money over to the DHHR or state Legislature, choosing instead to dole out the funds himself.

The federal Centers for Medicaid and Medicare Services wrote the DHHR May 15, asking where its percentage of the $10 million settlement is. The CMS provides 73 cents of every dollar the state spends on Medicaid.

"The State of West Virginia's methodology in arranging its settlement does not change the nature of the settlement nor the (DHHR) Secretary's obligation to account for overpayments," the letter says.

"Please advise CMS of any reason you may offer for which it should not issue a disallowance against the Medicaid program of the State of West Virginia in the amount of the settlement."

DHHR spokesman John Law said the matter has received a lot of attention from his agency.

"These letters, I don't want to say they are sent all the time because that would be misleading, but this is how CMS tends to deal with an overage or what they see as a mistake in Medicaid payments," Law said.

"So yes, we've had these letters before. When we owe them money, we don't send a check -- they withhold future payments."

That withholding troubles the state's Citizens Against Lawsuit Abuse group, which said Tuesday that McGraw's actions are jeopardizing Medicaid coverage for poor and disabled individuals.

It's all part of a "rogue attorney general accountable to no one," according to CALA President Steve Cohen. CALA adds the state could have to forfeit $10 million in Medicaid funds as a result.

The Legislature has also showed concern, wondering why the funds were never turned over to it.

In February, Chief Deputy Attorney General Fran Hughes promised the Legislature that McGraw's office would stop appropriating the settlement funds on its own. She also said the money was not given to the DHHR because then the CMS could claim its share -- "We have arranged a methodology that has prevented the federal government from coming back and seizing money," Hughes said.

Hughes previously served as general counsel for Human Services Management, a national consulting firm specializing in Medicaid financing

After the promise, though, McGraw continued to hand out money. More than $1 million went mostly to day report centers that are checkpoints for non-violent convicts.

Since the CMS wrote the DHHR, McGraw has handed out $170,000. When asked if McGraw's action constituted Medicaid fraud, Mary Kahn, spokesperson for the federal Centers for Medicaid and Medicare Services, responded, "We are currently discussing this issue with the state. I am not able to expand on that comment right now as there is no outcome to these discussions."

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